Defense

Bombardier's future as a major player in the passenger jet business could rest on its new CSeries aircraft. The first flight has been delayed from December until as late as next June, and a key Chinese fuselage supplier fell down on the job. In 2013, Bombardier needs the CSeries to fly and customers to buy. Chinese

Just as the aluminum industry profits by turning one soda can into another, aircraft manufacturers are waiting for the day when composite scrap from their assembly lines, or parts reclaimed at an aircraft's end-of-life, can be made flyable again.

Asian investors continue to take big stakes in the aircraft leasing market. A consortium of three Chinese investors plans to close on a deal to acquire the International Lease Finance Corp. That follows earlier sales of Jackson Square Aviation and the Royal Bank of Scotland's aircraft leasing business to Japanese buyers and Singapore Aircraft Leasing Enterprise's acquisition by the Bank of China.

Unmanned vehicles able to accompany troops and alleviate their loads have made a debut in Afghanistan, but if autonomous systems are truly to carry the burden they must be able to go wherever the soldiers go. Darpa's Agency's Legged Squad Support System (LS3) program aims to develop a four-legged robot that can carry 400 lb. and follow soldiers over rugged terrain, interacting like a trained animal with its handler. After initial outdoor trials early in 2012, Boston Dynamics is refining its LS3 for a U.S. Marine Corps field exercise in 2014.

Nothing reveals the political nature of this year's debate over across-the-board budget cuts as much as the dramatic change of discourse in the weeks leading to the deadline for preventing them. After a year of hearings, press conferences and road shows clamoring for a stop to sequestration, lawmakers and the Obama administration are now met with the deadline. Late last week, they appeared to have rationalized missing it.

Defense budget negotiations in Israel are on ice until after the Jan. 22 elections. However, the costs of Operation Pillar of Defense—aimed at eliminating the rocket threat from Hamas—will complicate an already difficult situation.

In the run-up to November's election, the U.S. aerospace and defense industry and its lobbyists were in favor of any budget proposal that left defense expenditures free to continue growing. Republican candidate Mitt Romney promised to peg defense to 4% of gross domestic product, but his attempt to make defense a key issue gained little traction. As Stimson Institute senior fellow Gordon Adams put it: “This election was not about defense. A very large and expensive lobbying effort to make it about defense failed.”

Once there were two major producers of military transports that dominated the world stage: the U.S. and the Soviet Union. Today, the U.S. has only two airlifters in production and has ceded the light-transport market to European competitors. The once-mighty Russian industry is making a comeback, but new competitors have emerged in Brazil and, potentially will develop in China.

Unmanned vessels are about to take a leap in capability, on the surface and beneath. The desire for persistent sensing is driving the need to develop fully autonomous, long-duration vehicles that can covertly patrol coastal waters or overtly follow submerged submarines. The U.S. Office of Naval Research plans to build prototypes of the Large-Displacement Unmanned Underwater Vehicle (LDUUV) to address the autonomy, sensing and energy challenges of a vessel able to operate independently for months.

To lower costs, Pentagon could turn milsat procurement on its head.

North Korea's successful launch of a satellite in December after 14 years of attempts put the hermit kingdom one step closer toward deploying an intercontinental ballistic missile. And Iran's nuclear weapons program—and the threat of an Israeli attack to cripple it—will keep tensions simmering in the Middle East.

When I began writing this column eight years ago, airlines were reeling as oil prices soared above $50 a barrel. Lockheed Martin was hoping to ramp up production of the Joint Strike Fighter in 2009, and Wall Street analysts were beginning to question whether a run-up in defense stocks had much steam left. Airbus was preparing to launch development of the A350 in response to Boeing's 7E7 (now 787), and the business jet market was embarking on a sales surge that would end in a spectacular crash.

Unmanned-aircraft manufacturers are approaching a crossroads. The wars that fueled the market's dramatic growth are winding down. International demand is growing but bringing with it increased competition. And the civil market is slow to start, and initially focused on small systems that cannot match the military business in sales value.

Challenges from archrivals Pakistan and China, and their growing arms capabilities, have forced India into a modernization drive, and its defense budget is expected to touch $50 billion in the next fiscal year. The Indian defense sector has been growing at an unprecedented rate and is now the world's leading weapons importer. A Swedish think tank that monitors global arms sales verifies that India's weapons imports have overtaken China's, which are now in second place, with 6% of global imports, as Beijing continues to build up its domestic arms industry.

In 2013, Russia again plans to increase its defense expenditures. The growth of the defense budget will continue in 2014 and 2015, with the aim of completing the massive rearmament of the forces started a few years ago.

The bifurcation of the business jet market is expected to continue in 2013, with strong demand for larger and pricier jets and sluggish sales of small and mid-sized aircraft. A Chinese company's failed bid in 2012 to acquire bankrupt Hawker Beechcraft is unlikely to slow Beijing's bid to become a significant player in the market.

Lockheed Martin delivered 30 F-35 aircraft in 2012, meeting a program goal just in time for its deadline of the New Year. The company had completed turnover of the first 20 of the single-engine, stealthy aircraft, but still had 10 remaining at the beginning of the month. The delivery flow was interrupted this year because of a 10-week machinists strike at the F-35 production plant in Fort Worth.

Can ad hoc design teams collaborating via the Internet produce a better infantry fighting vehicle quicker than traditional industry engineering organizations? Darpa aims to find out when it launches the first of three Fast, Adaptable Next-Generation (FANG) ground-vehicle design challenges in January 2013. Using new model-based design tools, virtual collaboration and foundry-style manufacturing, FANG aims to produce an amphibious combat vehicle in one-fifth the time of a conventional program.

The FAA's NextGen air traffic control modernization effort is a top priority, and 2013 will be a crucial year for its en-route automation modernization and automatic dependent surveillance-broadcast programs. Deployment of both is to be largely completed by the end of the year. If that does not occur, there could be serious headaches for other NextGen initiatives.

As war winds down and the focus shifts from Afghanistan to China, missile manufacturers will see a move away from today's heavy use of precision air-to-surface weapons toward an emphasis on long-range anti-ship and strike systems. Influenced by that trend, the world missile-systems market will see a steady increase in value over the next five years, but a drop in deliveries as production shifts to more expensive weapons. More than 194,000 missiles of all types are forecast for production between 2013 and 2017, valued at $61.9 billion.

KERRY NOMINATED: On Dec. 21 President Obama nominated Sen. John Kerry (D-Mass.), the son of a diplomat, to replace Secretary of State Hillary Clinton. Kerry, the chairman of the Senate Foreign Relations Committee, was widely anticipated to receive the nomination. Obama was also expected to name former Sen. Chuck Hagel (R-Neb.) as Defense Secretary. That did not happen, as opposition in the Senate and in wider Washington continued over Hagel’s past impolitic comments.

Despite spending the last year railing against across-the-board budget cuts, many in the Republican Party are now ready to accept them—at least in the short term. Before the presidential election, sequestration had been front and center for Republicans, particularly those on the House Armed Services Committee (HASC).

Boeing and Cassidian have been shortlisted in a competition to provide an off-the-shelf shipborne unmanned aerial system to assist the U.K. Royal Navy in its anti-piracy missions.

U.S. lawmakers representing helicopter communities are lauding a provision in the final 2013 defense authorization measure they say prohibits the Pentagon from entering new contracts with Rosoboronexport, the Russian arms provider.

LONDON — The Sultanate of Oman has finally signed a long-awaited contract to buy 12 Eurofighter Typhoon fighter aircraft. The deal, signed in Oman on Dec. 21, also includes eight Hawk jet trainers and in-service support. In all, the deal is worth £2.5 billion ($4.06 billion). Manufacturing of the aircraft is due to begin in 2014, with first deliveries in 2017. The new Typhoons will replace Oman’s aging fleet of Sepecat Jaguars, while the new Hawk Advanced Jet Trainers (AJTs) are likely to replace the fleet of Hawk 100s used for training.